socialism or capitalism?

What is the best economic system? Does the Bible have anything to say?

The challenges of Capitalism:

What is often referred to as  capitalism can result in either abuse of resources or abuse of others in acquiring them - and often does, though not automatically or necessarily. This is not so of true capitalism but rather the exploitation of it; sometimes referred to as "crony capitalism." This is what we often see today - particularly at the upper levels of government and the corporate world, especially within the monetary/banking system. This corrupted form of "capitalism" is fraudulent by design i.e. it is intentionally designed to exploit others. True capitalism - or free-market exchange - is intended to serve others. 

Making money isn't the driving force behind true free market exchange, service is. If we serve our fellow man well we reap the rewards. This is what is called a "win-win" scenario - when I help others acquire what they need or want I benefit in the process. This is not winning at the expense of another, which is exploitation. Communism and socialism assume all gains (profit) only come through exploitation. This is not the case in a true free market system. 

Corruption of productivity also does not negate the necessity of production proceeding distribution (or the *legitimacy of property ownership). We will address this more shortly.

Though capitalism addresses the problem inherent in socialism (having goods/resources to distribute) it poses its own set of problems. We still have to address selfish consumption and hoarding instead of sharing/charity. 

Productivity resulting in charity is actually the model promoted in the Bible. I prefer to call this free market productivity and exchange, vs capitalism, since crony capitalism and free market productivity are often lumped together. 

The limits of ¹Socialism:

¹Socialism does not work without production /productivity, i.e. you cannot give away what you do not have. Distribution of goods or services - socialism/communism - can not occur without something to distribute. This requires productivity first and the freedom (innovation) and incentive ²(fruitfulness) to be productive. Socialism kills both of these. Socialists themselves admit a productive economic system - i.e. capitalism - must be in place first before socialism - redistribution - can be exploited and implemented. 

In order for productivity to occur, several things must take place. For example, in the production of bread, you must have land to grow it on (which implies you own the land otherwise you must pay something to use it). The land must be fertile. Someone must plant, grow, and harvest the grain, grind it, bag it, mix it, cut the wood and heat the stove to bake it, pick up and deliver the bread, sell it, have a place to store it, with shelves to put it on display for customers to see and buy. The store must also be a pleasant place to visit if you are to see the maximum patronage -- or another store might offer a better buying experience and you lose customers -- etc, etc. There are many levels of effort/labor/energy that go into every level of production as well as the final product reaching the consumer. 

Giving away resources to others cannot occur without gathering, utilizing, and processing raw materials -- and raw materials must be available to process. This is why socialism or communism is often described as a redistribution of wealth. It's taking time, energy, resources, and wealth from somewhere and transferring it somewhere else...somewhere different from the origin of the energy that utilized resources to produce the product that finally reaches those who want and consume it. 

Since pure ¹socialism/ communism is an economic system that only redistributes instead of produces anything, it is parasitical in nature and design when it takes (vs gratefully receiving) from the producer and distributes it to non-producers. It can not perpetuate itself, i.e. it must have a "source" (host if you will) to draw resources from to distribute those resources. If it incorporates actual productivity (vs taking advantage of it), it is not pure socialism by definition. Why? Because productivity (capitalism, if you will) is considered exploitation in a purely socialist or communist model. 

Socialism and Capitalism are both right and wrong

The solution, however, isn't to oppose or shut down productivity/capitalism - the goose that lays the golden egg -- but to reassess charity -- what is the most God-honoring way to use those "golden eggs" he provides through our ²productivity. This is not only different from crony capitalism but from the general capitalist-consumption model. We could call this a third way. 

When productivity is only about personal/private consumption (for both the consumer and the producer) and does not take into consideration the importance of charity (blessing and benefiting others less fortunate) or proper care for the planet, it is not honoring God. The principles in scripture are to freely give what we have freely received and be good stewards of the gifts we are entrusted with. 

How is charity different from simple capitalism?

Fundamental to charity is recognizing our ability to generate a surplus (wealth) is a gift. All that we have, are, and can achieve comes from God. 

Deu 8:17  Beware lest you say in your heart, 'My power and the might of my hand have gotten me this wealth.' 18 You shall remember the LORD your God, for it is he who gives you power to get wealth, that he may confirm his covenant that he swore to your fathers, as it is this day.  19 And if you forget the LORD your God and go after other gods (money can be one of them) and serve them and worship them, I solemnly warn you today that you shall surely perish. 

And since it is a gift we must heed the wishes of the Giver i.e. the source of life and all things. We should ask, who gave us our resources and why did He give them? Certainly at least to take care of those he has put under our direct care. But what about those who are not directly tied to us or dependent on us? God calls us to give as we have received. To not do so is to violate the very person and nature of God himself who is the overflowing, giving, sacrificial God of love who is always pouring out his goodness on others -- even those who don't acknowledge him or his gifts. To do so aligns us not only with the second greatest commandment to love our neighbor as ourselves but the very nature of God Himself. 

One of the most well-known statements made by Christ is, "...God so loved the world he gave…"  Jn 3:16

So the problem isn't being productive, it is being selfish. Instead of being givers, we become takers. We are however encouraged to be both fruitful, multiply, and good stewards of - "rule over" - the resources God gives us i.e. to use them as God directs. To put them to good use. To love others as we are loved.

The problem in our secular society is we have rejected the notion of God and therefore our accountability to use the gifts of life as He designed and intends. 

Christ said, "he who is faithful with a little is given more." So we are not only commanded to love our neighbor but promised an increased benefit for doing so.

We can not assume (or condemn) those who seek to be productive do so solely for ³personal consumption. Though this is certainly our tendency - and more so in a secular society - it is not necessarily the only motive or even the primary motive simply by virtue of someone being productive or having the desire to be productive. 

I once heard a Christian businessman say the following. He was making the distinction between the way of the world and the way of Christ when doing business (He was making about 2 million a year at the time he shared this...for what it's worth). 

"The world's way is to get all you can, sit on the can, protect the can, and don't let anyone get into your can. 

Christ's way is to get all you can so you can give all you can." 

A clever but accurate distinction I believe. Both involve "getting" but why we get and what we do after we "get" makes all the difference.

Institutional redistribution vs personal giving

Forced distribution - an inherent part of the socialist economic system - is not the same thing as cheerful giving. An issue of socialism is it is "charity" at the end of the barrel of a gun which is not true charity at all. It is not voluntary but imposed upon the producer by an outside authority. Law drives socialism, not love. This shuts down free association and free giving i.e. freely loving your neighbor. In short, it robs us of our dignity, freedom, and personal responsibility - not just for the provider but also for the recipient of the resources. 

Redistribution of wealth is institutionalized "charity" versus individual or private charity/giving. It is using the power of the state to enforce "charity" which actually means it is no longer true charity. Some may consider this okay as long as the person in need is cared for. But if the dignity of the giver (as well as the receiver) is to be honored and maintained, both must freely take part. Philanthropy would be an example of free (vs forced) distribution of resources. 

Difference in generations

How socialism is viewed has changed over the years. The shift began in the late 50s to early 60s. Many in the younger generations have little concept of lack that the generation before the Boomer generation experienced. The Boomer generation was closer to parents or grandparents who escaped communist or fascist oppression to seek life in "the land of the free and home of the brave." This was a major part of the "American Dream." Unfortunately, over time, much of the material elements of that dream became more important than the familial elements to the point that with the Boomer generation, both mom and dad worked and abandoned their kids to daycare, exhaustion, escape into recreation and entertainment, and the like. This naturally produced a backlash. Boomers, and even more so, kids of Boomers rebelled against consumerism and saw the damage it was doing to family and the environment. Hence eventually leading to the rise of Bernie, socialism, and environmentalism. In short, the difference between generations is not that one generation is "dumb" or wrong and the other is not -- often asserted by both sides of this debate. It's that the generations have a unique value system, shaped by their individual experiences i.e. they each value things the other generation no longer values due in large part to their individual experiences and the world they each grew up in. 

The solution:

Since there must be resources -- and the gathering, engineering, and production of goods and services needed -- before distribution can be made, pure socialism/communism cannot work alone. Some would argue socialism is the marriage of communism and capitalism. 

Since self-preservation is bound up in the hearts of humanity -- resulting in us not having a sense of accountability to our Creator  -- focus on productivity and profit alone often leads to personal consumption and hoarding. 

So do we force those who are productive to share their resources with those who are less able to produce e.g. by raising the level of taxes on the largest and most productive to the point it kills the reasons for being productive? OR do we encourage charity and seek to help man understand that all things are gifts from God and God gives to us in part, so we might, in turn, give to others, as well as reward us in doing so?

The latter is God's design i.e. to give because we have received. This is not something that government can or should implement. Government has proven to be the least effective means of implementing true charity. It's virtually impossible since mandated charity is not true charity at all. Governments may incentivize it but anything more is coercion and not charity at all. The same brokenness (natural inclination to selfishness) that keeps private citizens from properly loving their fellow man also infects those in public life i.e. government. And in some ways even more so. As the saying goes, power corrupts, and absolute power corrupts absolutely. 

Caring for others is the role of the people who trust God and believe they will be held accountable for how they acquire and use all the things God entrusted to them. 

Even if one rejects God, most agree with the golden rule...do to others as you would have them do to you. 

The bottom line? 

Due to humanity's natural fallen inclination to take care of "number one" (self), there will never be a complete utopia in this life -- the goal of all economic systems.

This does not mean we should abandon either productivity or loving others as we were designed to. However, the only way we can be who God designed us to be is when we are fully connected to God, the source of life, love, and all things i.e. The solution to the socialist/capitalist question isn't imposing or enforcing a particular economic model on any given counties citizens but our being fully connected and aligned with God himself. If the individual parts of a system - i.e. you and I - are broken, the system will not work, no matter how perfect that system may be. For this reason, there can never be a perfect system, only perfect values and people willing to pursue them. Ultimately this can only occur through people who recognize the Creator and their accountability to Him.

The solution ultimately is spiritual, not political or economic. It is in first knowing God and then making him known; not just in word but also in deed.

For a discussion on giving as you have received click here. 

For a discussion on being fruitful i.e sewing and reaping click here

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¹I am using "socialism and communism" in the political and structured sense, imposed on us by the state, not in the organic sense. We are social-relational creatures and as God's image-bearers we are designed to receive and give love. However, we are also broken image-bearers. For more on our brokenness, click here. 

²We are clearly instructed in many places within the bible to be "fruitful." Most of these verses address spiritual fruit. However, spiritual fruit translates into actions that often produce material fruit. In fact, any action that produces material fruit should be driven spiritually i.e. by the Spirit. If it is, it is valid. It is spiritual in motivation with a material outcome. 

For several posts addressing operating in the Spirit click here.

³There is nothing wrong with personal consumption. A pursuit that is solely driven by personal and excessive consumption is our challenge, not consumption. If we do not consume vital resources -- water, food, shelter etc. -- we die. Consumption is not just necessary but vital.

*private ownership of property and the opportunity to acquire property through diligence is assumed throughout the bible. The founding fathers who penned the Constitution and Declaration of Independence acknowledged this when they declared we had a "right" to life, liberty, and the pursuit of happiness. What most don't know is that the pursuit of happiness is the right to the fruits of our labor which includes owning property.  

For an interesting discussion of this, click here. 

Communism and socialism justify taking money from the producers and giving it to those who don't produce (and sometimes genuinely can't... though often those who claim they can't often can)  Because they assume all productive and profitable endeavors are built on exploitation when they are not. For a further discussion on this click here.

Communism and socialism are built on a victim mindset. A victim mindset is the fruit of not knowing God and seeing how he intends and uses pain for our good if and we trust Him.